21 June 2013

SME’s continue to be gouged by Big Banks

Australia’s 350,000 SME business owners are among those being gouged by excessive service fees, according to data released yesterday by the Reserve Bank of Australia and the Australian Bankers Association.

While Australia’s big banks are generating less income from fees from personal banking (savings, cheque and debit accounts), they are making up the shortfall by a significant increase in revenue from their business customers.

Tyro Payments, CEO Jost Stollmann believes that while it is good news for households, Australia’s struggling SME community is being lumped with $7.3 billion worth of fees to ensuring the major banks continue to achieve record-breaking profits.

The increase of fees for credit and debit cards has accelerated from 3.9% in the prior year to 8.2% in 2012. Tyro had warned in the past, that the small businesses would be hit hard by bank fee increases and that at a time when expenses are going up everywhere.

“For too long Australia’s major banks have failed Australia’s SME’s. This is at a time when Australian retailers are already doing it tough, compounded by the growing reluctance of banks to finance debt of Australia’s small business, with 44 percent of applications being declined or not proceeding in the first quarter of 2013.[1]

“Almost 65 per cent of Australian business, or 200,000 companies, are absorbing all the service fees imposed on them and not passing them on to the consumer, as they need to remain competitive on price, especially with a record number of consumers purchasing online overseas, in the last twelve months,” Mr Stollmann said.

The biggest slap in the face for Australia’s SME’s is not only are they being continually gauged by the big banks, but the level of service they receive has a lot to be desired, with consumers and business being barred from accessing their money when bank systems fail as they have in the past 24 months.

[1] East & Partners Business Banking Index (BBI) – January 2013 – National, structured sample of 538 SMEs interviewed – SME Segment : A$1-20m turnover enterprises

Need to know more?

For more about this news story please contact:
Monica Appleby, Head of Corporate Communications on 0466 598 946 or mappleby@tyro.com
Sophie Cotterill, Corporate Communications Manager on 0414 960 292 or scotterill@tyro.com